Empirical Evidence On Ipo Underpricing

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Empirical Evidence On Ipo Underpricing

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Author : Marius Hamer
language : en
Publisher: GRIN Verlag
Release Date : 2008

Empirical Evidence On Ipo Underpricing written by Marius Hamer and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.

Diploma Thesis from the year 2007 in the subject Business economics - Investment and Finance, grade: 1,3, European Business School - International University Schlo Reichartshausen Oestrich-Winkel, 80 entries in the bibliography, language: English, abstract: This paper aims at establishing a link between the average level of initial return of IPO shares, existing underpricing explanations and the dot-com bubble. In years prior to the boom of the new economy, underpricing was explained by various theories, which have extensively been developed since decades. However, in the years 1998 to 2001 IPOs were overly underpriced, leading to assumptions about behavioural aspects and investor irrationality. Analysing a comprehensive dataset of 371 IPOs on the Frankfurter B rse between 1997 and 2007, this paper aims at providing evidence that the observed lower levels of initial returns in recent years can indeed be aligned with existing theories on the basis of rational behaviour of market participants. Firstly, the IPO process and its major participants will be presented followed by a review of relevant studies on the IPO phenomenon. In the next step, established underpricing theories are recapitulated. A descriptive analysis of the data sample points out the particularities concerning the company and transaction characteristics of the sample firms. In a last step, a regression analysis relates various proxies for information asymmetry to established underpricing theories. It gives reason to believe that the irrationality at the turn of the century has vanished and that underpricing can again be explained by established theories.

Value Creation By Private Equity Backed Ipos Underpricing And Long Term Performance In Germany

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Author : Matthias Hetzenecker
language : en
Publisher: GRIN Verlag
Release Date : 2020-11-19

Value Creation By Private Equity Backed Ipos Underpricing And Long Term Performance In Germany written by Matthias Hetzenecker and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-11-19 with Business & Economics categories.

Bachelor Thesis from the year 2019 in the subject Business economics - Review of Business Studies, grade: 1,0, University of applied Sciences Regensburg, language: English, abstract: This paper examines value creation by private equity-backed IPOs. It gives detailed insights on a mostly US-based research topic analyzing 134 German IPOs from 2002 to 2018, of which 49 were identified as PE-backed, and contributes empirical evidence on the discussion of private equity value creation. The empirical results provide detailed information on whether private equity financing can be a suitable financing source for companies by comparing and analyzing the performance differences between IPOs of companies with and without private equity sponsors. Furthermore, the paper provides empirical evidence on the IPO phenomena of underpricing and negative long-term performance for Germany, differentiating itself from former studies in terms of a broader time horizon and an extensive return calculation methodology. Since the locust swarms debate initiated by SPD politician Franz Müntefering, private equity investors have had to struggle with an extremely bad reputation in Germany. Unpopular measures such as company divestures or mass redundancies to achieve set turnover and return targets reinforce the negative image of financial investors. Accordingly, investor and business magnate Warren Buffet criticized that businesses under private equity control become a piece of merchandise. Nonetheless, the private equity industry continues to boom, reaching new records in terms of global business volume and transactions. Under these circumstances and new evolving discussions, it is essential to take a close look at the business model of private equity firms and to analyze potential short- and long-term value creation in their portfolio companies.

Variables Influencing The Severity Of Ipo Underpricing An Empirical Analysis Of The German Market

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Author : Justyna Dietrich
language : en
Publisher: Diplomica Verlag
Release Date : 2012-03

Variables Influencing The Severity Of Ipo Underpricing An Empirical Analysis Of The German Market written by Justyna Dietrich and has been published by Diplomica Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-03 with Business & Economics categories.

Underpricing refers to the phenomenon of abnormal first-day returns from initial public offerings (IPOs). Without doubt, any US investor would agree that one day-returns of 11.4% on average are exceptional and a worthwhile investment. Since then many studies have proven that it is a persistent phenomenon and also occurs on markets all over the world. The most puzzling question for scientists is why companies are leaving this money on the table and do not set an offering price that reflects the market demand at the offering date. The main focus of this paper is whether and how the findings of past research, primarily conducted for the US market, apply to the German IPO market. As a result, both investors and issuers shall receive practical implications for their decision-making within the IPO process. This study comprises a brief description of some important theoretical aspects that shape the price setting of an IPO. It focuses on business valuation as it is the basis for setting the price of an IPO. Furthermore, the most common price setting mechanisms are explained. Past research results and theories with regard to IPO underpricing will be outlined and put into relation to the upcoming analysis. This also includes the long-run performance of IPOs and deals especially with the question of whether IPOs are systematically overvalued by investors and, if so, why. The empirical analysis consists of a deduction of influencing variables and an applying theoretical model. Finally, OLS results will be presented and interpreted, which also includes practical implications for both, issuers and investors.

Ipo Underpricing In Germany Empirical Analysis Of Influencing Variables

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Author : Justyna Dietrich
language : en
Publisher: diplom.de
Release Date : 2011-10-27

Ipo Underpricing In Germany Empirical Analysis Of Influencing Variables written by Justyna Dietrich and has been published by diplom.de this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-10-27 with Business & Economics categories.

Inhaltsangabe:Introduction: Detected on the US market centuries ago, underpricing is the phenomenon of abnormal first-day returns from initial public offerings (IPOs). Without doubt, any US investor would agree, that one day-returns of 11.4% on average are exceptional and a worthwhile investment. Since then many studies have proven that it is a persistent phenomenon and also occurs on markets all over the world. The most puzzling question for scientists is why companies are leaving this money on the table and don t set an offering price that reflects the market demand at the offering date. Within that, researchers have also been trying to determine the factors that influence the severity of underpricing. Many different explanations with regard to the existence of underpricing have been derived thus far, with all claiming to be valid even if not exclusively. But despite this effort, research so far has not been able to create common sense. Some even argue that underpricing may not exist at all since most IPOs underperform severely in the long-run which leads some people to the conclusion that IPOs are in fact overpriced. The main focus of this paper is whether and how the findings of past research, primarily conducted for the US market, apply to the German IPO market. As a result, both investors and issuers shall receive practical implications for their decision-making within the IPO process. So far, profound underpricing research for the German market has been rather scarce. Most of the available literature concentrates either on dates before 1997 when most offering prices have been determined by using the fixed price mechanism whereas the most recent studies focus on the German stock exchange segment Neuer Markt exclusively. In contrast, this paper aims to give a more recent analysis of underpricing on the German market without distinguishing between different market segments. Additionally, a broad over-view and understanding of IPO underpricing, taking the long-run performance of IPOs into account, will be included. As a result, this paper is structured as follows: The second section consists of a description of some of the important theoretical aspects that have influence on the price setting of an IPO. It will concentrate on business valuation as it is the basis for setting the price of an IPO. Furthermore, the most common price setting mechanisms shall be explained. Additionally, the special role of the lead underwriter in the IPO [...]

The Phenomenon Of Ipo Underpricing In The European And U S Stock Markets

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Author : Oliver Reiche
language : en
Publisher: diplom.de
Release Date : 2014-06-01

The Phenomenon Of Ipo Underpricing In The European And U S Stock Markets written by Oliver Reiche and has been published by diplom.de this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-06-01 with Business & Economics categories.

The Initial Public Offering (IPO) marks one of the most important events of a company. Basically, the aim is to generate maximum proceeds by selling the company’s shares to investors. However, the shares that are sold seem to be underpriced as the price significantly soars on the first trading day. Since the very first detection of this phenomenon in the United States in 1969, several subsequent studies have documented the existence of worldwide IPO underpricing. This study focuses on IPO Underpricing in the European and United States Stock Markets by outlining and discussing the following essential issues: What is underpricing in the context of the IPO? Which motivations are there and how do they impact? Is there IPO underpricing in the markets of Europe and the United States of America?

Going Public

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Author : Tim Jenkinson
language : en
Publisher: Oxford University Press, USA
Release Date : 2001

Going Public written by Tim Jenkinson and has been published by Oxford University Press, USA this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Business & Economics categories.

Going Public investigates why companies routinely underprice themselves as they try to list themselves on the stock exchange. They subsequently underperform over the long-term and, in Going Public, the authors explore these 2 phenomena in plain English.

Behavioral Finance A Novel Approach

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Author : Itzhak Venezia
language : en
Publisher: World Scientific
Release Date : 2020-11-24

Behavioral Finance A Novel Approach written by Itzhak Venezia and has been published by World Scientific this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-11-24 with Business & Economics categories.

Behavioral Finance: A Novel Approach presents original papers exploring fresh ideas in behavioral finance. Its chapters span a wide range of topics in a distinct mix of traditional issues along with less conventional matters. This blend creates an optimal balance between chapters aiming at widening the scope of research in behavioral finance and those striving to refine the extant knowledge.Thus, along with traditional topics such as biases in pension decisions, analysts recommendation, gender differences in decisions and IPO's underpricing, the book also contains chapters on CEO and board members behavior, biased responses to regulation and regulatory reform, investors' attitudes towards corporate governance, cognitive biases in judicial decisions, the relations between behavioral finance and religion, new methods to calibrate the accuracy of forecasts, and the relations between behavioral finance and optimal contracting.Presenting original findings on a vast assortment of subjects, all in one venue, makes the book ideal as a reference book for researchers and practitioners interested in keeping up with the important developments in behavioral finance. The book could also serve as a handy guide for adapting insights from popular behavioral finance to some important underrepresented issues.

Handbook Of Research On Ipos

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Author : Mario Levis
language : en
Publisher: Edward Elgar Publishing
Release Date : 2013-11-29

Handbook Of Research On Ipos written by Mario Levis and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-11-29 with Business & Economics categories.

The chapters offer some important new insights into issues that will be of interest not only to the academic community but also to professionals involved in the preparation, structure and execution of such transactions, market regulators, and private a

China Business

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Author : Henry C. Steele
language : en
Publisher: Chinese University Press
Release Date : 2000

China Business written by Henry C. Steele and has been published by Chinese University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with Business & Economics categories.

For foreign business to succeed in China, it needs to be better informed of the challenges that China is faced with today. China was a centrally planned economy with very little international ties only three decades ago. Thus, it has to catch up for the lost years when there was neither opportunity to gain management experience nor any meaningful legal and regulatory framework to speak of. China is making up for lost time with unequalled energy and determination. Contributors in this book address a wide range of business issues through their research and present a glimpse on the complexity of doing business in China today. The book consists of four sections: the business environment; management issues; sales and marketing; international business. Contributors are from both business circles and the academia, who have witnessed not only progress but also the pain that has accompanied the path to a market economy.

A Survey Of The European Ipo Market

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Author :
language : en
Publisher: CEPS
Release Date : 2006

A Survey Of The European Ipo Market written by and has been published by CEPS this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.